My name is Shawn Derrick and they got me. But more on that later... Here's a little background on me:

I'm 29, have been married for 9 years now, just joined the Gideons (the people that put Bibles in hotels), I play piano and guitar by ear (can't read music to save my life), we just adopted a black cat that we named "Scratch", and I am extremely proficient at composing run-on sentences.

I worked at a construction company in the accounts payable department during my involement with the Amway/Quixtar business, but now I am self employed as a real estate investor (I am no Donald Trump by any means).

I was attracted to the idea of network marketing because passive income made sense to me. The following is a letter I wrote in 2001 detailing my involment in the Scamway (whoops, Freudian slip) Amway business. Be warned; it's a long one. If you need to go to the bathroom or pop some popcorn, now would be a good time.

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January 22, 2001

Re: History of Involvement in the Amway Business / Harteis System.

NOTE: The following abbreviated story is my personal recollection of my involvement with the Amway Business and the system of information designed to support the business (a.k.a. “the system). The author assumes the reader has a limited knowledge of the lingo common to all distributors / IBO’s that participated in the Yager / Harteis system.

To Whom It May Concern:
I became an Amway Distributor (April 1996) at the age of 18 while I was a senior in high school. I had no specific plans for my future, other than having some vague inclination to attend college. After graduating high school, I accepted a partial scholarship to St. Bonaventure University, where I planned to begin my freshman year. However, during the few summer months following high school graduation, I began to be influenced by my participation in what I will refer to as “the system”.

Shortly after I signed the application to start my Amway business, my sponsor, Bill Gibble, (a friend from high school who later married my sister and became my brother-in-law) invited me to attend a one-day business function in Williamsport, PA. I decided to accompany him and came away from that Saturday quite impressed with the event, yet unsure as to whether I could build an organization that would produce enough income for me to retire from my job.

Bearing in mind that I had never had a full-time job before, one would perhaps question why a naïve 18 year old would be interested in a business opportunity where the average participant was in their late 30’s – early 40’s. The reason I was attracted to the Amway business was that my dad had been downsized in the mid 80’s, and I remember what it was like seeing my father cut firewood for people just to put food on the table.

So quite naturally, when I saw other people at this business function telling horror stories about people they knew who had lost their jobs, and how by building an Amway business, I could build an income source that no one could take away from me, I was all ears.

After several months of attending function and listening to tapes, I began to do whatever my upline told me to do in order to build my business. I didn’t have enough money to pay for all the system related expenses (tapes, books, functions, voicemail, etc.), but my upline told me to do whatever it takes to participate in the system, because after all, the system is the only way I could learn to operate a successful Amway business.

I didn’t want to fail at my business and end up downsized like my father had been, so I decided to take drastic action. I was a member of a rock band, so I quit the band and sold all my music equipment (keyboard, electric guitar, 3 amplifiers, etc.) for a fraction of their cost. I also elected not to attend college, under the rationale that it was foolish to spend $40,000 and four years of my life to learn how to be an employee when I could just build my Amway business and achieve financial independence.

When I informed my parents, Tom & Rose Derrick, that I would not be attending college, they were concerned that I was making a huge mistake. They respected my decision, but as you can imagine, they wanted more information about the business opportunity that was redirecting the course of my life.

My parents met with my upline directs, Mark & Peg Pugh, who partially allayed their fears by letting them know that I was an ambitious young man who had the foresight to build a business of my own. This rhetoric was good for my ego, and as I would find out years later, good for Mark & Peg’s wallets as well.

For the next 5 years, I continued building the business, attending function, buying tapes and books, and laboring under the illusion that I was laying the foundation for untold wealth and success. Looking back, I can see that I was manipulated by one of the most sophisticated pyramid schemes since Carlo Ponzi.

Fast forward to 1999. The imminent launch of Quixtar, the sister corporation of Amway, was upon us. For me, this proved to be a pivotal event in the way I viewed the business.

In the 6 months prior to Quixtar launching in September 1999, I had sponsored many new people into the business. Most were excited about the possibilities of using the internet to conduct business, but some new people quickly changed their attitudes after I would register them as Amway IBO’s. Apparently they were searching the web for information related to Amway / Quixtar, and some found less than positive reviews. I, being a good upline, also decided to search the internet for information on Amway / Quixtar, so that I could defend against any negative rumors I found when I showed people the plan.

However, I came across a web page designed by a former Emerald named Jeff Probandt. He basically spilled the beans on the fact that the majority of the income that the bigger pins receive (Diamond and above) does not, in fact, come from the business. The bulk of their income comes from profits derived from the system (sale of tapes, books, CD-Roms, functions, etc.).

It never crossed my mind that the people made money from the system. There has to be a profit anytime money changes hands, so I always assumed that Internet Services, the company that manufactures our tapes, made money from the system. I also assumed that functions were priced at a break-even status, because Fred Harteis, my upline Double Diamond said from stage many times something similar to the following: ”We don’t need to host these functions. We could be anywhere in the world enjoying the wealth we have created. But we chose to be here with you folks this weekend to help you understand what you have in your hands. We don’t run functions for us; we put these events on for you.”

I don’t have a problem with people making money from the system. But I do have a problem with being lied to. I was led to believe that the lifestyle that the Diamonds and above had came from only building the Amway / Quixtar business. I was also led to believe that the only way to build a successful business was to commit wholeheartedly to the system; to never question the cost, but to “pay the price”. Apparently the purpose of instilling those beliefs in people like me was to keep me from discovering the fact that I had spent over $34,000 (very conservative estimate) on the system alone over the past 6 years.

This information bothered me deeply, so during the following 12 months, my belief in the integrity of the business dissolved. I asked both Mark Pugh and Fred Harteis about the system money. Mark told me that there is a small amount of profit that comes back to the upline directs and above to help cover the cost of the expenses incurred while building the business. Fred also explained to me that by investing in the infrastructure required to run functions and deliver tapes to me every week, he was taking money away from other investment that could generate cashflow for him. So naturally, why would I want to be a communist and deny him a small amount of profit.

These explanations by my upline did not solve the inner conflict I was feeling. In December 2000, I called Fred and again questioned him about the profit structure of the business and explained to him that it did not “sit right” with me. He talked to me for about 90 minutes and attempted to change my point of view about how and why the system operated the way it did. I inquired as to why the system taught us to run the business contrary to the 1979 FTC ruling regarding pyramid status (I believe the reason is because Fred doesn’t care if we make money from the business or not; he makes his money when we buy his tools). This was the second conversation I had with Fred regarding the system money.

Luckily for me, I had been a “naughty” little IBO and had used the web to educated myself quite extensively about how the system money really worked and what happened to people who raise serious questions about the legitimacy of it all (we are conditioned to not believe negative information about the business and to not talk to people who drop out of the business since they are losers or people who have been influenced by Satan). Also, I had looked up the phone number of Eric and Patty Scheibeler, an Emerald Direct couple in Fred’s group who were no longer “around” at the functions. No explanation was ever given as to why they quit the business (other that propaganda about them not having a big enough dream and being a traitor).

I called Eric, and after he was convinced that I was truly interested in finding out the facts and not trying to set him up, he told me that everything I understood about the system money and the way Diamonds deal with dissenters is true. He also explained what happened to him when he asked his upline about the system money, and the reasons for shielding us from factual information.. I will not go into detail about Eric’s story; that if for him to tell.

After reading the web info and speaking to Eric and Patty, I came to the conclusion that I could no longer continue to participate in the system. I felt terrible for unknowingly leading the people in my group down a road that would never deliver as promised, and have informed them about what I have learned.

In summary, I joined the Amway business and participated in the system because I believed that:

· I could have the lifestyle of the Diamonds if I built the Amway business – income and lifestyle misrepresentations.

· I was induced to purchase thousands of dollars worth of tools and seminars because I believed that such purchases were the only way to gain the knowledge and information needed to build a successful business – totally untrue and designed to keep me spending money for the sole benefit of Fred Harteis and Mark Pugh.

· This was the best business opportunity in the world and that all other ways of generating income were a waste of time when compared to the business – just another instilled belief designed to keep us spending our money on the system.

Also in summary, the following are the reasons I take issue with the way Fred Harteis operates the system:

· People are led to believe income and lifestyle misrepresentations that financially enslave most participants and solely benefit the upline who perpetuate such misrepresentations.

· The anti-pyramid measures (10-customer rule, 70% rule) are not enforced (for the obvious benefit of the upline).

· The system teaches people to build the business as a negative-sum game. More money on average is spent on the upline’s tool system than is generated in the business.

· People who question the legitimacy of the tool system too much are removed from the business through illegal and unethical means.

· The real money is in the tools, not by building the business. The tool income structure operates as a shadow business, is not regulated by anyone other than the Diamonds, and can be used as leverage against people who disagree with the upline.

· The system both fits the definition of and operates exactly like a cult; using mind control and behavior modification techniques. (In my opinion, the system is a full-blown 100% cult. If it walks like a duck and quacks like a duck, it must be a duck.)

I have just given a quick summary of my experiences in the business. For more complete information, please feel free to contact me at the address and phone number listed at the beginning of this letter.

Sincerely,



Shawn Derrick

I don't really have any positive comments about the Amway business, other than I have more money now since I quit. Also, I don't have to contact people and pretend to be excited about nothing all the time.

Seriously, my only real positive experiences were these: I learned how easy it is to be swindled, and I count myself wiser for the experience. I also learned to appreciate the power of passive income, which explains my real estate career (where you actually get checks every month, instead a crappy little bonus check that are used to buy more tapes with).

Here is a copy of a letter I sent to Dick DeVos, who was the president of the Amway Corp when I quit.

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January 23, 2001


Shawn Derrick

Dick DeVos & IBOA Board
7575 East Fulton Street
Ada, MI 49355


To Whom It May Concern:

I am writing to express my disappointment and disgust with the way the Amway / Quixtar companies are operated in accordance with “the system”. As you well know, the system I refer to is the training system of information and functions designed to “help” IBO’s build “successful” networking businesses.

I always thought that my upline Diamond, Fred Harteis, had the purest of intentions regarding his involvement in the system. On numerous occasions, I remember Fred saying from the stages of major functions, something to the effect of, “We don’t hold these events (functions) for us. We could be anywhere in the world tonight. We put these functions on for you (attending IBO’s), so that you can see what you have in your hands (the potential of the business).

As one would logically conclude, the upline Diamonds who run function have better things to do with their time, yet they continue to sacrifice themselves for the good of humanity, because they are such caring, selfless souls. Pure Hogwash!

I had no idea that the bulk of the income and lifestyle of many Diamonds comes not from building a profitable business powered by Amway / Quixtar, as most IBO’s are led to believe, but through the profits generated by function attendance and the sale of BSM’s (Business Support Materials – tools).

I also had no idea how much I had contributed to my upline's lavish lifestyle until I tabulated my system related expenses. I was utterly shocked to find I had spent approximately $34,000 on the system (tapes, books, CD-Roms, functions, hotels, etc.) over the course of my networking career! This figure does not include my vehicle expenses, lost wages, lost time, etc.

While I have no problem with my upline making a profit from the sale of information, I have a huge problem with being misled. I have a huge problem with the fact that my upline’s wonderful system teaches IBO’s to disregard Amway / Quixtar policies that are designed to keep the business from operating like a pyramid (we are taught to ignore the 10 customer rule, the 70% rule, etc.).

I was very disappointed to the point of being outraged when I discovered that:

· I had been brought into the business through deceptive practices (income and lifestyle exaggerations and misrepresentations).

· I, as well as every other IBO who “plugs into the system”, was led to believe that in order to succeed in the business, I had to purchase tools from my upline; that to do so was the only way to succeed. I was also taught to only work with the people in my business who also plugged into the system.

· Fear, intimidation, misinformation, and emotional control are the primary tools used by my upline to maintain order and control over his organization of downline IBO’s. (I used to scoff at the idea that the business was a cult. But now I clearly see that the system is, by definition, a commercial cult.)

And what infuriated me even more was the fact that the leadership of the corporation, namely Rich DeVos, had full knowledge that the above practices were the standard mode of operation by the owners of the system.

After reading a transcript of the “Directly Speaking” tapes, it became clear to me that Rich DeVos had the right intent, but for whatever reason, never followed through with enforcing his ideals. However, that does not excuse you from allowing the numerous abuses of the system to continue unchecked.

Since I am a reasonable person, I will give you the benefit of the doubt. Perhaps you gentlemen are unaware that the above referenced transgressions are occurring on a daily basis around the world. Perhaps you have no idea that hundreds of thousands of people are being bilked out of their hard-earned money through the deceptive practices of the upline leadership that own and control the system.

Perhaps you think that all of this can continue ad infinitum without any negative repercussions to your business (the web is exposing your illicit practices by informing people like me about how your abusive system operates – perhaps you would have better success by operating in only communist nations that restrict and control internet access – the system seems to operate by many of the same tactics that communist leaders use to control their citizens.)

In summary, I believe you are well aware of the content of this letter. It is sad to me to discover that the people I believed in, the “American Heroes” of today who are supposed to stand for what is right, are no more than common white collar criminals. I offer only one piece of advice: “Be sure your sins will find you out”.

Sincerely,



Shawn Derrick
IBO: 2107172